Why top mutual funds dumped these Indian stocks

Published : September 5, 2017

Indian Stocks from which MF schemes exited on June 16

Indian stocks gives good return to investor if entered in right stock and in right time. However, mere right investment doesn’t make return optimal. For returns to be optimal exit on right time and at right price are needed too. Proper knowledge of Mutual fund (MF) schemes timing for exit in any stock could help you decide in making an exit decision, if you use to hold that particular stock. Even of you are planning to enter in that particular stock, you may review before implementing purchase decision. The present article deals with few selected MF schemes who exited in Indian shares in June 16.

When an investor plans to invest money, the first question that stuck in his/her mind is where to invest and for how long the particular investment could be so as to get more and more returns. Investment in listed shares of a company is one of the various alternatives available to an Indian investor. However, it is considered risky though higher returns may be fetched than that from any other available investment. The risk could be mitigated and returns could also be optimized with proper timing, not only the entry but also the exits. There are numerous methods, both fundamental and technical available which helps decide to enter into a particular listed stock, but for timely exit very few methodology exists. keeping track on stocks that mutual fund schemes keep on exiting can provide you with good cues and help you define your own exit strategy for stocks you own. Top performing mutual funds schemes were selected for the present article whose method of selection is elaborated in an article entitled,” Indian Stocks Pick by Mutual Funds in May 2016“. The present article revolves solely on these schemes exit in stocks which they were held until May 2016. This may help you decide what stock which you may hold, to exit.

8 Indian Stocks – Heavily Sold by MF on June 16

A list of 52 stocks was found out that were sold by several mutual fund schemes in the month of June 16. Some stocks were seen with huge selling by schemes and in these stocks, more than ten lacks shares were sold by either the same MF or by different MF schemes. For instance, in JSW Energy Ltd major decline in holding by MF schemes was observed. One mutual fund scheme had 5157780 shares on May 16 and it exited from it as on June 16. In Ashok Leyland Ltd which is an auto sector company, as on May 16 four mutual funds was holding 31866945 shares which was reduced to 28549089 shares on June 16. Another stock is Ashoka Buildcon Ltd which was held by 6 mutual funds schemes and had the holding of 35931278 shares on May 16 and which reduces to 32763051 shares on June 16. The Detailed list of these stocks is attached herewith.

6 Indian Stocks – Number of MF Schemes Declined on June 16

There are several stocks in which the number of investing mutual fund schemes have reduced their holdings from May 16 to June 16. For investors, it would be better to review their own holding based on this. In Sundaram Finance Ltd., as on May 16 four, mutual fund schemes were having holding which reduced to three schemes on June 16. In Greaves Cotton Ltd five mutual fund had holding on May 16, and the number of schemes reduced to four on June 16. Similarly in Ujjivan Financial Services Ltd number of investing mutual fund schemes was reduced from four to three during the same period. Some other stocks in which the number of investing mutual fund schemes reduced are VRL Logistics Limited, Procter & Gamble Hygiene and Health Care Limited, Bosch Limited. The list of all these 6 stocks is attached in excel.

8 Indian Stocks – Exited By MF Schemes on June 16

If a mutual fund scheme exits from any stock it might be possible that the stock is not going to perform well in near short to mid term as because mutual fund exits from the stock after detailed scrutiny of the particular stock. Vardhman Special Steel Ltd, Sree Jayalakshmi, HCL Technologies Ltd., Navkar Corporation Ltd, V-Guard Industries Ltd, Hindustan Dorr-Oliver Ltd, SKS Microfinance Ltd JSW Energy Ltd are some of the stocks from which mutual fund schemes have exited their holdings completely on June 16. In JSW Energy Ltd one mutual fund scheme had the holding of 5157780 shares till May 16 and that scheme has exited from it on June 16. In SKS Microfinance Ltd. one scheme had a holding of 3300000 shares till May 16 and the scheme has exited completely from this stock on June 16. Hindustan Dorr- Oliver Ltdis another company where the MF scheme had exited on June 16 which had holding of 2756639 shares till May 16. A list of all these 8 stocks is attached in the excel.

About Author

A Finance Professional with over 12 years of experience in Capital Markets & Investment Advisory. Ankit has worked with some of the largest & award winning financial services groups at Regional and National Level. Currently with RMoney, Ankit is a Specialist of Investment Advisory for Equity, Mutual Funds , Insurance, PMS , Fixed Income Products , Structured Products etc, I have managed both Retail, HNIs & Corporates business segments . Ankit loves writing on financial planning, equities, mutual funds & other investment products.